Why do I have no success with wholesalers?!...

Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes

8y

I feel your pain it's the same here in my market.

I've yet to meet a legit wholesaler with real deals.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

8y

@Brian Garrett to me it just means your market rebounded and is strong.. its a development game for the next few years have to create your own deals..

does not help with all the TV guru's teaching flipping this creates a ton of competition that did not exist.

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Matt K.

Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes

8y

@Jay Hinrichs do you think the fact that people can hop on a computer and go to zillow or the like and see their house is worth xyz has anything to do w/ it? People now basically have "instant" access to what their home is "worth".....

Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes

8y

Originally posted by @Jay Hinrichs:

@Brian Garrett to me it just means your market rebounded and is strong.. its a development game for the next few years have to create your own deals..

does not help with all the TV guru's teaching flipping this creates a ton of competition that did not exist.

I completely agree not to mention my market is full of people with money laying around so that doesn't help either.

I'm going to start some of my own marketing after the holidays and see if I can stir up some deals that way.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

8y

@Matt K. Maybe but.. reality is.. TV shows... BP Guru's direct mail services.. people for whatever reason thinking wholesaling is how you get rich when you have limited to no capital and want to get started.. so distressed assets start getting a lot of attention and people are not complete idiots.. you get 5 post cards saying the same thing and all of a sudden their house is worth more than they think It is in their mind.. has to be why would everyone want to buy it.

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Zachary Wilson

Pueblo, CO · Member since 2012 · 54 posts · 32 votes

8y

I feel your pain as well. Seems with the way the market is going real Estate is “cool” again lol. So we have new realtors and new wholesalers that are entering the market. I️ agree with you that some of the wholesalers and under estimating rehab costs and also over estimating the resale value. Recently I️ have taken a different approach with wholesalers. I’ll try and take the time to explain to them why the deal doesn’t work for me personally. I’ll walk them through how I️ analyze my rehab costs and how I️ estimate my ARV. Normally I would just pass on the deal. But lately I️ feel trying to explain where a buyer is coming from may help them. Eventually I’m hoping that by helping them they will remember me and when they need to close a deal fast without doing the “buyers list” thing they may just forward on to me.

Mark Pantak

Investor · Houston, TX · Member since 2016 · 16 posts · 19 votes

8y

Having been a "professional wholesaler " many years ago, in Houston, then on the board of directors for one of the largest REIA groups in the country in that same city. At some point you learn to train others how to do wholesaling right, by the real numbers, with a complete & real package as I taught them to prepare to sell me their deals. For many years I taught the Wholesaling Focus group & would leverage my time by speaking & teaching & buying in that one Market. The bottom line is many people are self centered & lazy & don't want to do the work. I get all kinds of emails from "wanna be wholesalers" who I do not know? & their deals are crap? Have bought zero from any wholesalers all of this year. When it gets this bad, like in 2007-2008 & people are bragging about the money they are making doing no work? And everyone has become a guru selling crap to newbies. We are close to the end of a market cycle. There are always wholesale deals & when there are too many people willing to pay too much money, you are not going to see many real wholesale deals. You have to go get them yourself. That is what I do, then I buy them myself. There are always deals, you just have to know how to find them, not on the MLS, not on the internet, not with a wholesaler. My best deals have no competition & are word of mouth. You can sometimes find a deal from any source & when I can put a junk house on the MLS & have multiple offers above the wholesale price? Why wholesale what I got?

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Drew WhiteheadPro Member

OP

Architect and Investor · Salt Lake City, UT · Member since 2016 · 35 posts · 13 votes

8y

Thanks all for your comments. I agree that it is an easy game to get into and the TV shows makes it more enticing to get into. I'm just starting to ramp up my REI and will hopefully make it my full time job in the near future. I have not done any marketing yet and hopefully that will bring some deals. What is your best success? With my architecture background, I currently look for deals that have good potential for my taste. Am I being too picky? Maybe. But I'm also not that desperate I guess.

I like your approach @Zachary Wilson about giving the wholesalers comments back on the deals they send. I will try that and see what happens.

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

8y

It is sold as a GET RICH SCHEME. I always ask WHY would someone give away 40K, 50K, or more for a 5K assignment fee. I wouldn't. A local agent friend of mine used to assign. He recently told me he no longer assigns and gives away the bulk of the profit. His last deal netted him about 40K on a flip. He just listed another one that looks like a 40K home run. The other problem is most of these people are unlicensed, have no oversight, and worse than that, no money. They think RE is fast easy money. It isn't. Often times, when you see the word "wholesaler" that means unlicensed broker...most with no education, no money, etc...all believing they will make tons of money. I try to push them into buy and hold. Over time, this will make LOTS of sustained income. Last but not least, the "wholesaling" garbage has been pushed on BP. I recently talked to a guy that paid $5400 for a "wholesaling" class here locally. One BIG problem: he is operating illegally. He doesn't know it yet, but he WILL find out:) You CAN bank on that.

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Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes

8y

@John Thedford Lol I knew you would be chiming in on this post.

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

8y

Originally posted by @Brian Garrett:

@John Thedford Lol I knew you would be chiming in on this post.

As long as BP doesn't start charging by the minute:)

Fact is: most of it is GURU garbage. New investors believe the hype, etc. Not good. VERY few will succeed. As Jay stated, it MAY work in some markets like Detroit. However, if that market is saturated with dilapidated junk, it may be easy to buy, but who would you sell it to?

Want good deals? Make them happen. Market. Market. Market. Even though deals are not easy to find, they are out there. Just have your checkbook ready and when something great comes along, grab it before the other guy.

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

8y

@Brian Garrett

Have you had ANY good experience with any licensed "wholesaler" or unlicensed broker??

Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes

8y

Originally posted by @John Thedford:

@Brian Garrett

Have you had ANY good experience with any licensed "wholesaler" or unlicensed broker??

I'll reference you back to my first post on this discussion for that answer but you already know it!

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

8y

Originally posted by @Brian Garrett:

Originally posted by @John Thedford:

@Brian Garrett

Have you had ANY good experience with any licensed "wholesaler" or unlicensed broker??

I'll reference you back to my first post on this discussion for that answer but you already know it!

MYTHomania is common in the RE industry:)

Gordon CuffePro Member

Investor · Roseville, CA · Member since 2009 · 1k+ posts · 583 votes

8y

@Drew WhiteheadI have run into many so called wholesalers who sell properties allready on mls. I dont see how anybody would buy them and wonder if any get sold via this way. If they want to sell from the mls, they might as well become agents. I only sell off market deals. It also bugs me when wholesalers put zero marketing dollars into deals and just try to sell real wholesalers deals by adding a fee to them. Not much of a deal for the end investor anymore. As long as people are selling wholesalers courses there will always be newbies coming and going. Hopefully they go away faster than longer.

Cody Evans

Wholesaler · Fairfield, CA · Member since 2017 · 472 posts · 145 votes

8y

I see you guys are interested in getting on my buyers list...

It's a tough game. I don't understand why anyone with money for buy and holds would want to wholesale. I always recommend against it. "Get rich quick".. ha ha ha. "Get a small sum of cash and maybe some experience if you work hard and get lucky" is more like it!

Brian Pulaski

Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes

8y

I have had 5 months of no luck with wholesalers. I have only seen 3 deals show up in my target area, and none would have made any money. I still plan to investigate any possible deal, but at the moment am not relying on it solely.

Chris Majors

Rental Property Investor · Evans, GA · Member since 2014 · 74 posts · 65 votes

8y

At least from my experience, wholesalers are a mixed bag.

Most are in it for the immediate profit and don't care (or do not know any better) about their long term reputation with the "real" investors in their market. There are a ton of wanna-be investors that want to be "sold" a good deal. These poor folks are prey to the "wholesalers" and buy things based on the wholesaler's ARV and repair numbers. They will do one or two deals and then realize they are losing money. Seems to me most get burned out after losing their hard-earned money, but some actually learn from their mistakes and learn the real numbers themselves (I fall under this category).

Unfortunately this situation seems to be fairly prevalent because of the lack of real deals on the MLS. That being said, most licensed residential real estate agents that deal with lower-end "investment" properties also lack this knowledge as well. I offer on nearly every REO with some meat on the bone in my area of interest (two counties). 9 times out of 10 I am out-bid, and really don't see how these "investors" that are buying these properties are actually making money based on what they are paying (unless they are doing the work themselves and buying a "job"). In many cases, the starving realtors that need commissions sell crappy deals off the MLS to ignorant "investors" in a way that is almost as bad as the greedy wholesalers.

On the other hand, I have purchased three investment properties in the last couple months from wholesalers and only one from the MLS that were actual deals. The wholesalers were not super greedy and maybe even possibly took my lower offers because they knew I would close quick with no B.S. Don't get me wrong, during this time frame I've sifted through 100+ wholesaler "deals" and EVERYTHING on the MLS during this time frame which is a good bit of work.

It's of my opinion that there are too many toxic gurus pitching get-rich-quick real estate that takes advantage of sellers and buyers alike. The good news is that it's easy to spot the real investor/wholesalers from the fakers. The good ones only wholesale because their deal-flow exceeds their ability to buy/rehab at the time. The wholesalers that do not rehab themselves are usually the ones with little resources and knowledge, thus their numbers cannot be trusted.

Ian WalshBusiness Member

Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes

8y

A wholesaler is just a small version of the MLS. Some deals will work and some won't.

Richard Dale-Mesaros

Investor · Campton, NH · Member since 2010 · 284 posts · 142 votes

8y

Here in NH we have very low inventory, but we do have a decent amount of real wholesalers (real in the way they are leaving enough meat on the bone for investors), but still, I never go by their numbers, which are usually way short. All of the various avenues for filling our pipeline with leads work; they each have their advantages and disadvantages and it's just a case of keeping several of them going at any one time so a deal pops up every now and then. Some of these avenues are more hands-off, like your website, wholesalers who call you and 'we buy houses cash' ads, then there are more labor-intensive activities such as door-knocking, calling pre-foreclosures and doing out-of-state mail-outs. The key is to do stuff that is a fit for how you function, try to be as efficient as possible (you can waste a lot of time in this biz), track how well each avenue is working and don't forget my favorite quote, 'the fortune is in the follow-up', so stay on top of those leads!

Todd Dexheimer

Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes

8y

I have never bought much from wholesalers. They tend to be over-priced and easier to get better deals on the MLS and through my own marketing. When the market was cold, from 2008-2013 I bought nearly all MLS, when it began to heat up, it was MLS and marketing.

James Green

Wholesaler · Waldorf, MD · Member since 2015 · 459 posts · 245 votes

8y

@Drew Whitehead try to just deal with wholesalers, that contract off market properties. I see plenty of wholesalers in my area doing the same thing. They put a contract on a property that has been listed for 90+ days, then send it out at the same listed price or slightly lower & claim it's a "hot deal". I've reached out & try to explain to them that you have brought no value to the deal! If it's been on the market 90+ days, then plenty of investors have already passed the property by. They say "makes sense", then I see their email again in one of the meetup emails I get.

Have you every called one of them & tried to educate them or even asked them why they think its a deal?

Garrett Hogan

Developer · Boston, MA · Member since 2014 · 88 posts · 56 votes

8y

I too have had little success with wholesalers in my market. The only good wholesale deals come from other legit developers in my network who happen to sell deals because of some actually compelling reason. Too many projects, got something approved to build and now want to flip it etc. I think the biggest problem is that alot of wholesalers are beginners that actually have no idea how much a rehab should cost, what the rehab should entail etc. The barrier of entry to becoming a wholesaler is quite low, and the gurus who pitch it as a get rich quick method certainly do not help. Ive personally had more success using an acquistions manager to source deals from many different places. Since you work full time, I would encourage you to consider hiring an acquisitions manager and align the pay and incentives such that he is motivated to find you deals.

Cody Evans

Wholesaler · Fairfield, CA · Member since 2017 · 472 posts · 145 votes

8y

@James Green

I don't know about the people on this forum educating wholesalers but I have had quite a few local investors reach out to educate me. They have been a big help and I am guessing the big point most people that want to start wholesaling miss out on is following up on deals they have assigned. That is where my learning will really take place because I can then review what I did wrong not only for the investor but for me. What if you are being too conservative with your rehab numbers? You are easily leaving tens of thousands of dollars on the table and potentially hundreds of thousands. If I am too conservative with my numbers the first time around it is no sweat because these people are teaching me the game and not just buying a deal so good for them. Most wholesalers are like most people that want to flip houses but never take action. Maybe I will fail but I am going to put my time in.

You have to screen your wholesalers like you are screening deals.